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Presentation ByPresentation By
Dr. SEEMA GUPTADr. SEEMA GUPTA
ROLE OF MORAL PHILOSOPHY ON ETHICALROLE OF MORAL PHILOSOPHY ON ETHICAL
DECISION MAKINGDECISION MAKING
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Moral PhilosophyMoral Philosophy
Much of the recent ethics research inMuch of the recent ethics research in
business has focused on factors influencingbusiness has focused on factors influencing
unethical behavior of managers.unethical behavior of managers.
The influence of moral philosophy andThe influence of moral philosophy and
values on managerial decisionvalues on managerial decision--making hasmaking has
been well recognized in the development ofbeen well recognized in the development of
theoretical models of decisiontheoretical models of decision-- making.making.
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Johnson and JohnsonJohnson and Johnson -- The TylenolThe Tylenol
casecase
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Johnson & Johnson Tylenol CaseJohnson & Johnson Tylenol Case
1.1. Tylenol is one of the companys successful products.Tylenol is one of the companys successful products.
2.2. The sales of the product had captured over 35 percent of the $The sales of the product had captured over 35 percent of the $1 billion analgesic market1 billion analgesic market-- over three times the market shareover three times the market shareof the nearest competitor.of the nearest competitor.
3.3. The product contributes about 17 percent of the companysThe product contributes about 17 percent of the companysprofits. The cyanide that caused the deaths was placed inprofits. The cyanide that caused the deaths was placed incapsules of Tylenol.capsules of Tylenol.
4.4. Though the product was available in both capsule and tabletThough the product was available in both capsule and tabletform, the capsule form became instantly popular since it wasform, the capsule form became instantly popular since it was
easier to swalloweasier to swallow
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Johnson and Johnson faced twoJohnson and Johnson faced two
problems.problems. The first issue is to whatThe first issue is to what
information to release toinformation to release to
the media and to thethe media and to the
worried customers?worried customers?
Should the companyShould the company
recall capsules onlyrecall capsules only
from Chicago or thefrom Chicago or the
nation wide?nation wide?
The second problemThe second problem
was how to save thewas how to save the
Tylenol brand name.Tylenol brand name.
Many marketing expertsMany marketing experts
were convinced that thewere convinced that the
brand was doomedbrand was doomed
that the public wouldthat the public would
associate it with death.associate it with death.
This decision would have cost an estimated 31 million bottleswith a retail value of $ 100 million and the permanent loss of
market share.
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The response ofJohnson & Johnson to the TylenolThe response ofJohnson & Johnson to the Tylenol
crisis can be explained as sound business decisioncrisis can be explained as sound business decision
making. The efforts to restore a valuable brandmaking. The efforts to restore a valuable brand
name were costly but it paid off. This approach isname were costly but it paid off. This approach is
also called deontologist approach or rule basedalso called deontologist approach or rule basedapproach to decision making.approach to decision making. An important factor inAn important factor in
deciding on a recall was the companys Credo, whichdeciding on a recall was the companys Credo, which
has guided several generations of the company to takehas guided several generations of the company to take
right decisions.right decisions.
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Ford Pintos CarFord Pintos Car
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While Ford was acquitted of criminal charges, itWhile Ford was acquitted of criminal charges, itlost several million dollars and gained a reputationlost several million dollars and gained a reputationfor manufacturing "the barbecue that seats four.for manufacturing "the barbecue that seats four.
In 1981 inIn 1981 in Grimshaw v. Ford Motor CoGrimshaw v. Ford Motor Co the Californiathe CaliforniaCourt ofAppeal for the Fourth Appellate DistrictCourt ofAppeal for the Fourth Appellate Districtreviewed Ford's conduct, and upheldreviewed Ford's conduct, and upheld compensatorycompensatorydamagesdamages of $2.5 million ($5.86of $2.5 million ($5.86 million today) andmillion today) and
punitive damagespunitive damages of $3.5 million ($8.2of $3.5 million ($8.2 millionmilliontoday)today) against Ford. It also upheld the judge'sagainst Ford. It also upheld the judge'sreduction of the punitive damages from the jury'sreduction of the punitive damages from the jury'soriginal verdict of $125 million ($293original verdict of $125 million ($293 million today).million today).
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MORAL PHILOSOPHYMORAL PHILOSOPHY
DEONTOLOGYDEONTOLOGY
JUSTICEJUSTICE
RELATIVISMRELATIVISM
CONTRACTUALISMCONTRACTUALISM
TELEOLOGYTELEOLOGY
UTILITARIANISMUTILITARIANISM
EGOISMEGOISM
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JusticeJustice:: ethicalethical actsacts oror decisiondecision areare thosethose thatthat leadsleads toto anan equitableequitabledistributiondistribution ofof goodsgoods andand servicesservices..
ItemsItems:: JustJust andand FairFair
ContractualismContractualism:: refersrefers toto thethe creationcreation ofof socialsocial moralmoral codescodes byby agreementagreement,,
notnot enforcedenforced byby anyany authorityauthority.. ItemsItems:: ViolatesViolates unwrittenunwritten contract,contract, ViolatesViolates unspokenunspoken PromisePromise..
RelativismRelativism :: allall ethicalethical beliefsbeliefs andand valuesvalues areare relativerelative toto onesones ownown culture,culture,feelings,feelings, oror religionreligion.. EveryEvery person,person, oror perhapsperhaps everyevery culture,culture, devisesdevises itsitsownown setset ofof moralmoral standardsstandards..
ItemsItems :: InIn thethe BestBest InterestsInterests ofof Company,Company, Selfish,Selfish, PersonallyPersonally SatisfyingSatisfying
Deontology : actions, persons, or motives are tobe judged by their conformity to moral rules.
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UtilitarianismUtilitarianism:: AnAn actact isis ethicallyethically rightright ifif itit leadsleads toto aa netnet increaseincreaseinin thethe overalloverall goodgood;; anan actact isis ethicallyethically wrongwrong ifif itit leadsleads toto aa netnetdecreasedecrease inin thethe overalloverall goodgood..
ItemsItems:: greatestgreatest goodgood forfor thethe greatestgreatest number,number,
EgoismEgoism :: anan actact isis ethicalethical whenwhen itit promotespromotes thethe individualsindividuals bestbestlonglong--termterm interestsinterests.. EgoismEgoism meansmeans oneone takestakes thethe actionaction thatthat resultsresults ininthethe greatestgreatest goodgood forfor oneselfoneself..
ItemsItems:: InIn thethe bestbest interestsinterests ofof company,company, Selfish,Selfish, PersonallyPersonally SatisfyingSatisfying..
Teleological Theories: actions,persons or motives are to be judged
by their consequences